Organizational Design & Structural Process
- Distinguish between line and line and staff structures and explain why line and staff structures is superior?
ANSWER: - Followings are the main differences between line organization structure and line and staff organization structure:
Line organization structure: centralized authority at the top level.
Line and staff structure: centralized authority but experts involve in guidance, planning and suggestion.
- Unity of command
Line structure: every subordinate has one superior to command. Therefore, there is the unity of command.
Line and staff structure: There is also the unity of command but line authority are not forced to implement the export in opinions and advice.
Line structure: It is the simple form of organization. It has the clear division of authority and responsibility.
Line and staff structure: It is complex form of organization. Sometimes, there may create confusion because of authority and responsibility.
Line structure: There is the hard and strict discipline.
Line and staff structure: It has freedom to provide suggestion and guidance.
- Provision of experts
Line structure: There is no provision of experts and specialists.
Line and staff structure: There is the provision of experts and specialists.
Line structure: suitable for small and medium scale organizations.
Line and staff organization: Suitable for large scale organization
Line structure: It is more economical than other forms of organization.
Line and staff organization: It is more expensive.
- Types of personnel
Line structure: There is only one type of personnel only for line authority.
Line and staff structure: There are two types of office personnel i.e. line and staff authority give decision and staff authority gives advice only.
- Possibility of conflict
Line structure: No conflict can be found.
Line and staff structure: There are the possibilities of conflict between line and staff authority
Features of Line and Staff Organization
There are two types of staff:
- Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.
- Staff Supervisor- Operation Control Manager, Quality Controller, PRO
Line and Staff Organization is a compromise of line organization. It is more complex than line concern.
Division of work and specialization takes place in line and staff organization.
The whole organization is divided into different functional areas to which staff specialists are attached.
Efficiency can be achieved through the features of specialization.
There are two lines of authority which flow at one time in a concern:
- Line Authority
- Staff Authority
Power of command remains with the line executive and staff serves only as counsellors.
Merits of Line and Staff Organization
Relief to line of executives- In a line and staff organization, the advice and counselling which is provided to the line executives divides the work between the two. The line executive can concentrate on the execution of plans and they get relieved of dividing their attention to many areas.
Expert advice- The line and staff organization facilitates expert advice to the line executive at the time of need. The planning and investigation which is related to different matters can be done by the staff specialist and line officers can concentrate on execution of plans.
Benefit of Specialization- Line and staff through division of whole concern into two types of authority divides the enterprise into parts and functional areas. This way every officer or official can concentrate in its own area.
Better co-ordination- Line and staff organization through specialization is able to provide better decision making and concentration remains in few hands. This feature helps in bringing co-ordination in work as every official is concentrating in their own area.
Benefits of Research and Development- Through the advice of specialized staff, the line executives, and the line executives get time to execute plans by taking productive decisions which are helpful for a concern. This gives a wide scope to the line executive to bring innovations and go for research work in those areas. This is possible due to the presence of staff specialists.
Training- Due to the presence of staff specialists and their expert advice serves as ground for training to line officials. Line executives can give due concentration to their decision making. This in itself is a training ground for them.
Balanced decisions- The factor of specialization which is achieved by line staff helps in bringing co-ordination. This relationship automatically ends up the line official to take better and balanced decision.
Unity of action- Unity of action is a result of unified control. Control and its effectivity take place when co-ordination is present in the concern. In the line and staff authority all the officials have got independence to make decisions. This serves as effective control in the whole enterprise.
- What is Matrix organisation? Briefly explain the advantages of a matrix organisation.
ANSWER: - In a matrix organization structure, employees may report to many managers, and some from one section may report to one boss while the rest report to a different boss.
For example; let us say that you are a mechanical engineer working in a functional department. Your organization gets a project and they need a mechanical engineer to assist the project manager on certain tasks. In this case, you may be assigned to the project for a short time, or they may transfer you there while your services are required. If you’re assigned there for a short time, you may have to report to two bosses.
The matrix organization structure takes the characteristics of both types of organization structures. The matrix structure is a composite of the projectized organization structure and the functional organization structure. Here the knowledge, skill, or talent of an employee is shared between the functional department and project management team.
In a matrix structure, some employees usually work under more than one boss (usually two). The first boss will be their functional manager and the other often is a project manager.
The functional manager may look after the functional part of the project; he may decide how to do the work, and may distribute the project work among his subordinates. The project manager will have authority over the administrative part of the project, such as what to do, follow-up on the schedule, evaluate the performance, etc.
Working in a matrix organization can be challenging because you have a confusing role while reporting to two bosses. To avoid confusion and work efficiently in a matrix organization, you must be clear on your role and responsibilities and the work priorities.
The matrix organization structure usually exists in large and multi-project organizations, where they can relocate employees whenever and wherever their services are needed. The matrix structure has the flexibility of relocating the organization’s talent. The employees are considered to be shared resources among the projects and functional units.
Advantages of a Matrix Organization Structure
The following are a few advantages of a matrix organization structure:
Highly skilled and capable resources can be shared between the functional units and projects, allowing more open communication lines which help in sharing the valuable knowledge within the organization.
The matrix structure is more dynamic than the functional structure because it allows employees to communicate more readily across the boundaries, creating a good, cooperative, work environment which helps to integrate the organization.
Employees can broaden their skills and knowledge areas by participating in different kind of projects. The matrix structure provides a good environment for professionals to learn and grow their career.
In functional departments, employees are very skilled, and project teams can get these highly skilled employees whenever their services are needed
Since there is a sense of job security, employees tend to be loyal to the organization and perform well, and therefore the efficiency of a matrix organization is higher.
- Formal organisation is ´de jure ´ and informal organisation is ´ de factor ´. Comment.
ANSWER: -Formal Organisation is formed when two or more persons come together. They have a common objective or goal. They are willing to work together to achieve this similar objective.
Formal Organisation has its own rules and regulation. These rules must be followed by the members (employees and managers). A formal organisation has a system of co-ordination. It also has a system of authority. It has a clear superior-subordinate relationship. In a formal organisation, the objectives are specific and well-defined. All the members are given specific duties and responsibilities. Examples of formal organisation are: - a company, a school, a college, a bank, etc.
Features of Formal organisation:
(1) The formal organisational structure is created intentionally by the process of organising.
(2) The purpose of formal organisation structure is achievement of organisational goal.
(3) In formal organisational structure each individual is assigned a specific job.
(4) In formal organisation every individual is assigned a fixed authority or decision-making power.
(5) Formal organisational structure results in creation of superior-subordinate relations.
(6) Formal organisational structure creates a scalar chain of communication in the organisation.
Advantages of Formal Organisation:
- Systematic Working: Formal organisation structure results in systematic and smooth functioning of an organisation.
- Achievement of Organisational Objectives: Formal organisational structure is established to achieve organisational objectives.
- No Overlapping of Work: In formal organisation structure work is systematically divided among various departments and employees. So there is no chance of duplication or overlapping of work.
- Co-ordination Formal organisational structure results in coordinating the activities of various departments.
- Creation of Chain of Command: Formal organisational structure clearly defines superior subordinate relationship, i.e., who reports to whom.
- More Emphasis on Work: Formal organisational structure lays more emphasis on work than interpersonal relations.
Informal Organisation exists within the formal organisation. An informal organisation is a network of personal and social relationships. People working in a formal organisation meet and interact regularly. They work, travel, and eat together. Therefore, they become good friends and companions. There are many groups of friends in a formal organisation. These groups are called informal organisation.
An informal organisation does not have its own rules and regulation. It has no system of co-ordination and authority. It doesn´t have any superior-subordinate relationship nor any specific and well-defined objectives. Here in informal organisation, communication is done through the grapevine.
Features of informal organisation:
(1) Informal organisational structure gets created automatically without any intended efforts of managers.
(2) Informal organisational structure is formed by the employees to get psychological satisfaction.
(3) Informal organisational structure does not follow any fixed path of flow of authority or communication.
(4) Source of information cannot be known under informal structure as any person can communicate with anyone in the organisation.
(5) The existence of informal organisational structure depends on the formal organisation structure.
Advantages of Informal Organisation:
- Fast Communication: Informal structure does not follow scalar chain so there can be faster spread of communication.
- Fulfils Social Needs: Informal communication gives due importance to psychological and social need of employees which motivate the employees.
- Correct Feedback: Through informal structure the top level managers can know the real feedback of employees on various policies and plans.
Strategic Use of Informal Organisation. Informal organisation can be used to get benefits in the formal organisation in the following way:
- The knowledge of informal group can be used to gather support of employees and improve their performance.
- Through grapevine important information can be transmitted quickly.
- By cooperating with the informal groups the managers can skilfully take the advantage of both formal and informal organisations.
- Explain causes of conflicts between line and staff members of the organisation.
ANSWER: - I. Reasons of conflicts given by Line Managers
Line managers are responsible for ultimate results or goal achievement and, thus, give the following reasons for line/staff conflict
- Practical approach to the problem:
Line managers feel that staff suggestions cannot always be implemented as they do not fit in the actual operating design of the organisation structure. Their suggestions are often away from reality and practicability.
However, if the suggestions are accepted and the results are not as desired, the responsibility is shifted to line managers but if the results are positive, the staff managers claim merit for the same. Thus, staff managers do not have the responsibility but enjoy authority over the area where advice is sought. There is apparent mismatch between the authority and responsibility.
- Encroachment upon line authority:
Line managers often complain that staff managers do not confine to offering suggestions only, they also try to en-roach upon line authority by telling them what to do and what not to do. They impose their ideas on line managers.
Staff managers offer suggestions even on matters which fall within the jurisdiction of line managers and on which no suggestions have been asked for. Line managers feel they spend so much time discussing these issues with staff managers that they cut time from operating their line departments.
- Lack of overall vision of the organizational problems:
Staff managers are often convicted of the fact that they lack insight into the actual problems of the organisation. They have knowledge in their specialised area of interest which may not be of help to line managers in relation to goals of the organisation.
Staff managers are not aware of the practical problems regarding implementation of their suggestions. Though their recommendation may be good, but they may not be feasible and practical.
- Age considerations:
By the time line managers reach the top positions, they are experienced to look into organisational matters. Staff, on the other hand is usually dynamic, young, probably fresh MBA graduates who are enthusiastic in their approach towards the organisational operations. Line managers blame the staff as lacking practical experience while staff blames line for not trying the ideas proposed by them.
- Reasons of Conflict Given by Staff Managers:
Staff managers view the problem in a different perspective and offer the following arguments that result into line-staff conflict:
- Absence of motivation:
Staff managers plea that suggestions offered by them are not implemented by line managers and, therefore, they lack motivation to give suggestions. In most cases, line managers may ask for suggestions but they have the right to accept, reject or amend the suggestions.
This gives them prerogative over staff managers and they do not give due regard to staff suggestions. Sometimes, they do not even ask for suggestions but when something goes wrong, they lay the blame on staff managers for either being complacent in the matter concerned or giving impractical suggestions.
- Resistance to change:
Irrespective of the age considerations, staff managers feel their ideas are innovative and require new learning of concepts and processes by line managers. Since line managers do not easily accept change in their thinking and operating procedures, they do not welcome the ideas given by the staff.
- Lack of authority:
Staff managers feel that they should have authority to get their ideas implemented. If they are asked for expert advice, they should even have the authority to get their advice accepted. Line managers take the credit for implementation if the staff advice bears fruitful results. There is no motivation to give suggestions if they have no authority over their acceptance/implementation by line managers.
- Call for help:
Staff managers sometimes complain that line managers approach them with the problem after the situation becomes difficult to manage. Suggestions or advice in such a situation may not be effective. Staff should be consulted time to time, in fact, during the planning phase of the organisational task and not when problems arise in carrying out the task.
- Staff advice is sought for as a last resort:
Staff specialists often blame line managers for not seeking the advice on a continuous basis. They feel that line managers ask for their advice only as a ‘last resort’, when no other way of solving the organisational problems seems practical to them.
Reasons for line-staff conflict are mentioned below reflecting the attitudes of line managers and staff specialists:
- They deal with the organisation as a whole and, therefore, are highly protective of the organisation.
- Since they hold ultimate responsibility for organisational decisions, they generally want simple and easy solutions to solve the organisational problems.
- They often have a short-sighted approach towards organisational problems.
- They are accused of asking wrong questions at the wrong time.
- They are highly action-oriented and want immediate and easy solutions to the problems.
- They feel staff members lack experience to work in functional areas.
- They are specialists in their areas of experience; do not view the organisation as a whole; are often critical of the organisation.
- They study the problem in depth before making recommendations, arrive at all possible solutions to the problem, analyse their pros and cons and arrive at the most feasible solution. In this process, they offer solutions which line managers feel are complicated to be implemented.
- Their approach towards the problem is often far-sighted and has a long-range orientation.
- They are accused of giving wrong answers as they do not relate these answers to the overall organisation structure.
- They are highly analytical, thought-provoking and have a far-sighted approach towards the problem and, therefore, arrive at solutions after spending enough time in studying and analysing the problem.
- They feel that line managers do not try new ideas and prefer to work with the existing knowledge.
- "Organisation structure refers to the differentiation and integration of activities and authority roles and relationship". Explain
ANSWER: - Organization structure refers to the differentiation and integration of activities and authority roles and relationship in the organization. Thus, there are two consideration in organization design problem. Differentiation and integration. Differentiation is defined as like differences in cognitive and emotional orientations among managers in different functional departments, and the differences in formal structure among their departments; and Integration as “quality of the state of collaboration that are required to achieve unity of effort by the environment”.
Differentiation occurs in large companies when different departments, sections or branch offices create their own corporate culture within the parent company´s overall structure. For instance, the sales staff at a differentiated company will have a different approach to their tasks than the accounting department. Companies also can be differentiated based on product lines. A highly-differentiated brewery will have sections that brew pilseners, lagers and ales, each with its own production, accounting and marketing operations, while operating under the same corporate umbrella.
Integration relates to how the different areas of the company coordinate their operations. A highly-integrated company has strong connections between departments and product lines, with each section working under a cohesive set of rules and strategies. Integrated companies are highly vertical and hierarchical in nature. These companies operate from a "top-down" mind-set, where the management dictates the structure of each department rather than allowing the individual departments to set their own agendas.
Prioritization and Time Constraints
One factor that determines whether a company practices differentiation or integration is how each department sorts its priorities. For instance, sales staff focus on bringing in revenue, while accountants place their attention on reducing costs, but both priorities contribute to increasing the company´s profits. Another type of prioritization involves how departments handle time constraints. In a software company, the development staff work in terms of months or years, while the customer support staff must come up with solutions in hours or days.
Communication methods also dictate whether a company employs a more differentiated or more integrated approach. As an example, sales staff deal primarily in face-to-face or telephone communications, while information technology workers depend on e-mail and text messages. The marketing department may also use less formal language when communicating, where legal staffers are trained to parse every word for multiple meanings. When departments must work together, they must develop an integrated communication strategy to achieve their goals.
- What is the importance of Span of Control? What factors influence the span of control in a particular organisation?
ANSWER: - Importance of Span of Control or Supervision:
The span or range of control or supervision is a controversial problem.
We have to recognise certain limitations on a human being influencing his span of control:
(1) He has limited time at his disposal for his activities. Time is a valuable but a scarce resource.
(2) He has limited available energy and must depend upon others to supplement his energy when his workload increases considerably.
(3) He can give attention and concentrate only on a limited number of subjects or problems at a time.
These three limitations on the capacity of human beings:
(1) Support the concept of span of control and
(2) Also indicate that the optimum span of control varies among individuals and depends upon a number of situational factors, such as presence of good communication devices, degree of decentralisation, control practices, type of management, and nature of work to be supervised and so on.
Physical conditions, quality of communication, for example, can change the span of control, i.e., the number of people that one can control and supervise directly.
There is no controversy regarding the existence of the span of control principle. Of course, we cannot lay down a universal and exact limit of span of control, say, 6 to 8 persons controllable by an executive, particularly at a higher level.
It is obvious that a single executive cannot supervise effectively too many subordinates. There is a close relation between delegation and span of control. If the limit of span of control is crossed, we have inadequate supervision and control.
If the limit is not reached — e.g., a manager can control eight subordinates but is controlling only four subordinates — we have too close control, the number of management levels would increase and multiple levels in the hierarchy of organisation will further create difficulty in upward and downward communication.
Similarly, if the number of subordinates is too small, the executive will be idle and his services will be underutilised. The oldest reference to span of control and delegation is found in Jethro’s advice to Moses that he should establish “rulers of thousands and rulers of hundreds, and rulers of fifties, and rulers of tens.”
Principle of span of control:
The number of subordinate positions (in an organisation chart) directly reporting (accountable) to a superior position, i.e., boss, should be that number which is considered as optimum and which balances:
(1) The essential subordinate activities,
(2) The spans of personality, energy, knowledge and attention of the superior,
(3) The communications, and
(4) The expense problems associated with additional levels of management or organisation.
Modern management experts believe in the general character of the span of control and they point out that the actual span of control cannot be rigid and universal.
It shall be determined on the basis of:
(1) The number of important activities at the next lower level of the organisation structure,
(2) The personal qualities (e.g., intelligence, experience) of the superior as well as the subordinates, and
(3) The development of communications within and between the levels of the organisation structure.
Proper span of control is a behavioural and situational question. It varies with:
(1) Ability of both the boss and his subordinates: (If both are capable, large span is feasible);
(2) Relative location of the superior in the management hierarchy (higher location, lower span);
(3) Fear of possible rival (lower span due to reduced delegation);
(4) Faith of the superior in his subordinates (higher span due to more delegation);
(5) Degree of teamwork present (higher span due to minimum conflict problem);
(6) The nature or type of work (limited span due to highly dynamic and volatile activities); and
(7) Need for communication (limited span needed communication is frequent and involved).
Factors Determining Span of Control:
Two variables directly influence limit on the span of control:
(1) Capacity of the higher executive to manage his work.
(2) Capacities of subordinate executives. Apart from these two basic factors, there are many other factors which can determine the actual optimum span of control.
- The Type of Organisation and Management:
Clear and comprehensive plans and policies at all levels reduce the volume of personal decision making of a manager. Therefore, his span of control and supervision can easily increase. Clarity of plan and definiteness of responsibility and use of standing plans (policies, procedures and rules) reduce the problems of decision making.
Clear-cut and precise authority-responsibility, planned performance standards, standing operating procedures, standard methods, good budgets, etc., are some of the means to reduce the number of decisions a manager has to make. Hence, span of control will increase.
- Nature and Importance of Work to be supervised:
If the work is routine, highly standardised and uniform, we can establish standing plans because problems follow a set pattern. Few emergency or complex decisions are required. We have usually programmed decisions.
Hence, the span of control can increase. Variety and complexity of problems, volatile and changing work, higher uncertainty and risk in decision making are usually found at the top management level of big organisations. Hence, at higher level of management we have limited span of control.
- Facility of Staff Help:
If a manager gets staff help in performing his reserved responsibilities (planning, organising, motivating, etc.) he can bear a greater work load and can have a larger span of control. With adequate specialised staff and also personal staff services, a manager even at a higher level can handle many subordinates.
Of course, it is presumed that a manager is skilled and able to delegate his authority to many subordinates. Capable staff help and superior-subordinate working relationship based on mutual faith and confidence are both essential to widen the span of control.
If the boss has quick grasp and ability to command and go along with people, i.e., leadership qualities, he can control a large number of subordinates. But if the boss is hesitant, tactless and does not have leadership qualities, he will have limited span of control.
- Ability and Capacity of Subordinates:
In addition to the best staff help and ability to delegate, we require competent and qualified line subordinates to take up responsibility and shoulder accountability for work performance without detailed supervision of the boss.
If subordinates are trained, developed and experienced men with self- confidence and self-control, they will need minimum supervision or attention of the boss. Thus, the quality of line subordinates can influence the span of control as a limiting factor.
- Other Factors Governing the Span of Control in Practice are:
Time available for supervision, degree of decentralisation and delegation (higher degree, greater span) and control practices. For instance, under personal observation, we have limited span and under a system of written progress reports, we have wider span of control
- Contrast the virtual organisation with the boundary less organisation.
ANSWER: The Virtual Organization: The essence of the virtual organization is typically a small, core organization that outsources major business functions. It is highly centralized, with little or no departmentalization.
Virtual organizations create networks of relationships that allow them to contract out manufacturing, distribution, marketing, or any other business function where management feels that others can do it better or more cheaply.
The virtual organization stands in sharp contrast to the typical bureaucracy in that it outsources many generic functions and concentrates on what it does best. The major advantage to the virtual organization is its flexibility. The primary drawback is that it reduces management’s control over key parts of its business.
The Boundary less Organization: The boundary less organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. Because it relies so heavily on information technology, some call this structure the T-form (or technology-based) organization.
By removing vertical boundaries, management flattens the hierarchy and: • Minimizes status and rank. • Uses cross-hierarchical teams. • Uses participative decision-making practices. • Uses 360-degree performance appraisals
Functional departments create horizontal boundaries. The way to reduce these barriers is to replace functional departments with cross-functional teams and to organize activities around processes. When fully operational, the boundary less organization also breaks down barriers to external constituencies (suppliers, customers, regulators, etc.) and barriers created by geography. The one common technological thread that makes the boundary less organization possible is networked computers.
- Write short notes:
- Delegation of authority
ANSWER: - Definition: The Delegation of Authority is a process through which a manager assigns responsibility to the subordinate to carry out the work on his behalf. Also, a certain authority is delegated to the subordinate to the extent, which is sufficient to accomplish the assigned responsibility.
Principles of Delegation of Authority
Following are the guidelines that can be followed by the managers to practice an efficient delegation:
Principles of Delegation of Authority Following are the guidelines that can be followed by the managers to practice an efficient delegation:
- Principle of Functional Definition: An organization is comprised of different functional departments, each contributing to the organizational goals and in turn have their specific objectives. Thus, clearly defined objectives of each department, the expected results, the specific activities to be performed and intradepartmental relationships help the manager to determine the requirements of that specific position.
- 2. Principle of Result Expected: Before actually delegating the authority to the subordinate, the manager must know the purpose of such delegation and the results expected from it. The goals, targets and the standard of performance must be clearly defined to direct the actions of the subordinate towards the accomplishment of a given task in a required manner. This principle helps in determining the authority to be delegated which is sufficient for completing the responsibility.
- Principle of Partity of Authority and Responsibility: This principle states that, the responsibility and the authority co-exists. This means, if the subordinate is assigned certain responsibility, he must be given some level of authority i.e. power to perform his responsibility. Thus, both the responsibility and the authority shall be clearly defined to the subordinate, so that he knows what he is required to do within the powers delegated to him.
- Principle of Unity of Command: According to this principle, every subordinate should have a single supervisor from whom he gets the authority and to whom he is solely accountable. This means, the subordinate should get the instructions from a single superior and perform those responsibilities assigned by him. In case, if the subordinate is required to report to more than one boss, then there may be a conflict and delay in the managerial operations.
- Principle of Absoluteness of Responsibility: This principle asserts that responsibility cannot be delegated, which means even after delegating the authority to the subordinate to perform the certain tasks on the manager’s behalf, the manager will be solely responsible for the doings of the subordinate. In other words, whatever actions being taken by the subordinate, the manager will be accountable to his senior. Thus the responsibility is absolute and remains with the superior.
- The scalar Principle: There are clear lines of authority in the organization, i.e. who is under whom. This helps the subordinate to know, who delegates the authority to him and to whom he shall be accountable. Also to whom he shall contact in case things are beyond his control. Thus, this principle asserts, that there should be a proper hierarchy in the organization.
- Principle of Exception: According to this principle, the subordinate shall be given a complete freedom to perform his responsibilities under the purview of his authority. The manager should not interfere in between his work and must allow him to do even if he commits mistakes. But in some exceptional cases, the managers can interfere and even withdraw the authority delegated to the subordinate.
- Scalar chain
ANSWER: - Definition: Communication is a crucial aspect of any organisation and the principle of scalar chain revolves around the flow of communication from management to the lowest rank in the company. Scalar chain is a chain of all supervisors from the top management to the person working in the lowest rank.
Description: A clear line of communication is very important for any organisation to achieve its objectives. The communication has to flow in an order for it to be effective. Scale chain identifies that path. According to the principle, any information should follow a pre-defined path, which is from the supervisor to the one in lowest position, to avoid any ambiguity.
This chain pattern should be followed at every department of the organisation to be effective and the process should not be tinkered with for it to remain effective. Let´s understand it with the help of an example. Suppose your company has 10 employees.
Now, if employee 4 has to communicate with employee 8, he/she has to follow the scalar chain, wherein the flow of information will take place from employee 4, 5, 6, 7, and then 8. The process is simple and avoids any ambiguity.
It is not a complicated process but it does take time because for information to reach employee 8, it has to go through a four-step structure. In case of emergencies, this system might not be effective.
There are various advantages of scalar chain. One is that it is very important for any organisation to have a chain of command to avoid chaos. Every employee knows whom to approach when faced with a problem.
It also allows the top management to communicate their message to the entire organisation and supervisors at each level become responsible to execute that order. A proper chain of command allows business to run smoothly but it also makes it inflexible at times.
- Hyper turbulence
ANSWER: - Once upon a time in a business world far, far away, organizations would hold a competitive advantage over their industry rivals that was sustainable for an extended and indefinite amount of time. However, times have changed and have ushered in a new era of competition known as hyper turbulence
Hyper turbulence can be defined as organizations´ use of tactics to disrupt the competitive advantage held by industry leaders. Hyper competition typically occurs at a rapid pace.
For example, let´s say that you own a fast-food restaurant and your items are priced slightly higher than a rival fast-food chain. If you decide to adjust your prices to be closer to or lower than your rival, that is hyper competition.
For organizations looking to succeed in a hyper turbulence market, there are four factors that need to be mastered:
Technology and innovations
Decline of boundaries
- Strategic approach of organisation effectiveness
ANSWER: - There are a number of approaches to Organizational Effectiveness but we will discuss about four only. Organizational effectiveness and corporate performance research appear to take care of the same core construct: organizational effectiveness and performance. Since the beginning of industrialization, the concept of assessing organizational effectiveness has been crucial in organization practice and theory.
Generally, it is not clear what experts mean whenever they make reference to effectiveness and it has led to ambiguities in interpreting the results of their work. The sad thing is, just a few studies have tried to give a definition of Organizational Effectiveness.
Four Approaches to Organizational Effectiveness
Approaches to Organizational Effectiveness
- Goal Approach
The Goal Approach is also called rational-goal or goal-attainment approach, it has its origins in the mechanistic view of the organization. This approach assumes that organisations are planned, logical, goal-seeking entities and they are meant to accomplish one or more predetermined goals. Goal approach is worried with the output side and whether or not the organization attains its goals with respect to preferred levels of output. It sees effectiveness with respect to its internal organisational objectives and performance. Typical goal-attainment factors include profit and efficiency maximization.
- System Resource Approach
This approach to Organizational Effectiveness was developed in response to the goal approach. The System Resource Approach sees an organisation as an open system. The organisation obtains inputs, participates in transformation processes, and generates outputs. This approach emphasizes inputs over output. It sees most organizations as entities which function in order to survive, at the same time rivalling for scarce and valued resources. It assumes that the organisation consists of interrelated subsystems. If any sub-system functions inefficiently, it is going to influence the performance of the whole system.
- Internal-Process Approach
This approach has been developed in response to a fixed output view of the goal approach. It looks at the internal activities. Organizational effectiveness is assessed as internal organizational health and effectiveness. According to Internal-Process Approach effectiveness is the capability to get better at internal efficiency, co-ordination, commitment and staff satisfaction. This approach assesses effort as opposed to the attained effect.
- Strategic Constituencies Approach
This approach suggests that an efficient organisation is one which fulfils the demands of those constituencies in its environment from whom it needs support for its survival. It assesses the effectiveness to satisfy multiple strategic constituencies both internal and external to the organization.
Strategic Constituencies Approach is ideal for organizations which rely highly on response to demands. The Strategic-constituencies approach takes explicitly into consideration that organizations fulfil multiple goals: each kind of organizational constituency (like proprietors, workers, consumers, the local community, etc.) is supposed to have distinct interest’s vis-à-vis the corporation, and will thus use different evaluation criteria.
- Organisations as Networks
ANSWER: - A network-centric organization is a network governance pattern emerging in many progressive 21st century enterprises. This implies new ways of working, with consequences for the enterprise’s infrastructure, processes, people and culture
With a network-centric configuration, knowledge workers are able to create and leverage information to increase competitive advantage through the collaboration of small and agile self-directed teams. For this, the organizational culture needs to change from one solely determined by a single form of organizing (e.g., hierarchy) to an adaptive hybrid enabling multiple forms of organizing within the same organization. The nature of the work, in an area, determines best the way its conduct is organized and the networked mediation of work activities affords interoperability among differentially-organized areas of work
A network-centric organization is both a sensible response to a complex environment and an enactor of sensibility on that environment. The business climate of the new millennium is characterized by profound and continuous changes due to globalization, exponential leaps in technological capabilities, and other market forces. Rapid developments of ICT are driving and supporting the change from the industrial to the information age.
In this world of rapid change and uncertainty, organizations need to continually renew, reinvent and reinvigorate themselves in order to respond creatively. The network-centric approach aims to tap into the hidden resources of knowledge workers supported and enabled by ICT, in particular the social technologies associated with Web 2.0 and Enterprise 2.0. Essentially though, a network-centric organization is more about people and culture than technology.
A group of legally independent companies or subsidiary business units that use various methods of coordinating and controlling their interaction in order to appear like a larger entity. In a business context, three main types of network organization are typically seen:
(1) Internal where a large company has separate units acting as profit centers,
(2) Stable where a central company outsources some work to others, and
(3) Dynamic where a network integrator outsources heavily to other companies.
There have been periods in which a product has got difficulty because of loss of favour with the public, bad management or even neglect. Attention of the sales Vice President to the problems of the some products has caused him, at times, to fail to recognise difficulties in others even though the product manager of such products has recognised them and had brought them to his attention. The burden on present officers is becoming so heave to ensure proper attention to all their responsibilities. Employment of assistant’s apparently causes loss of the close touch of the top group that is necessary to ensure success. Opportunities for increasing the line of products and expanding the business are being lost because of the lack of time among the executives to study them or manage new products. In any business where specialists sold under trade mark brands are the major business of a company. It is necessary for that company to continually bring out new products and to study old ones to determine, in their case, the point of no return with regard to promotion and advertising expenses. Once the top executive group has approved the idea of a new product, is put under the responsibility of one of the Vice- Presidents. He develops an organisation and brings it along, at least, the advertising appropriate for the product, accounting and public relations. Top executives conclude that Modern Corporation has a problem of organisation.
- How have changed conditions in this company affected the appropriateness of its organisation structure?
Answer: - Adopting a new organizational structure often requires a serious commitment of company resources, so businesses don’t undertake it lightly. Making a change is worth it, though, when the structure no longer supports the company’s goals. Changes both inside and outside a company can affect a structure’s effectiveness, and some of these are typical and predictable. Knowing them in advance allows the small business owner to anticipate the need for adjustments before the company’s organizational structure becomes a problem.
Expanding Employee Roster
A new business typically has few rules or defined job roles -- whoever is available does whatever is needed. Such free-flowing, flexible and adaptable situations are called organic. When growth demands new employees, the organizational structure no longer can remain loose because employees must be coordinated and held accountable. Creating the needed rules and roles makes the structure more mechanistic. The most mechanistic structure is the functional structure, a hierarchy that features a top boss who oversees lower-tier bosses, who oversee employees. The functional structure is usually the first formal structure small businesses adopt.
As companies age, their structures tend to become more mechanistic. Over time, management establishes more rules and procedures, standardizing activities. By the time a company reaches the maturity stage in its organizational life cycle, it’s likely to have several management layers exerting a lot of control. If bureaucracy becomes an impediment, the company may switch to a more organic structure, slashing management and giving employees more control. Knowing
that the evolution of a company tends to lead to a mechanistic structure, the small business owner can intervene before bureaucratic problems become acute.
Changes in the business environment may make a company’s existing structure competitively inappropriate. An economic downturn may demand a change to the network structure -- for example, cutting employees in favour of outsourcing. Facing the same economy, another company may rely on the efficiency and economies of scale that mechanistic structures provide. If revolutionary changes occur, say, a sizable competitive threat from a new market entry, mechanistic structures may founder because they aren’t nimble enough to quickly stave off threats the way less bureaucratic companies might.
A small business owner formulating long-term goals should be aware that sweeping strategic changes can strain an organizational structure. For instance, it’s counterproductive to aim for cost leadership when the company’s structure doesn’t support efficiency or economies of scale. A move to a more mechanistic structure would be in order. By contrast, if the future of the company requires creativity, employees will be hard-pressed to supply it in a tightly controlled mechanistic environment. In general, organic structures are appropriate to situations requiring innovation, flexibility and rapid response, while mechanistic organization can achieve standardization, quality control or mass production.
The functional and network structures are on opposite ends of the continuum of most mechanistic to most organic structure. In between are the divisional structure, which organizes departments according to products, customers or geography; the matrix structure, which divides work according to both divisions and functions, such as production or shipping; and the organic team structure, which brings people of different functional strengths together to work on projects.
- What changes do you recommend to be made in the company’s organisation structure?
Answer: - Many small businesses start with few employees and even fewer managers. As the business grows, owners often create an organizational structure to react to changes, rather than creating a thoughtful plan that prepares for future growth. Planning ahead is the best way to create an organizational structure that helps your business grow, even if you’ve already been in business for a while.
Create a Dream Structure
The easiest way to begin creating the optimal organizational structure for your business is to design one as if you haven’t opened your doors yet. Doing this allows you create a management and staff structure that best suits the needs of your business model, rather than one that best suits the needs of your current staffing levels. Pretend you are able to structure your organization without regard to any staff you currently have or honouring any commitments you’ve made to see how your company should be set up, then work from there to tweak the organizational chart based on the realities of what you have in place.
Organize by Function
Look at the various functions your business has and create your organizational chart to ensure each one is properly staffed. Typical business functions include production, marketing, sales, finance, human resources and information technology. Even if you are using contractors for some of these functions, someone at your business is in charge of these contractors and should have those organizational responsibilities. As your business grows and you consider bringing contractors in house, you can refer to your organization chart to determine who will handle t